World markets cheer Greek, Japanese news

By Ben RooneyMay 31, 2011: 1:02 PM ET

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NEW YORK (CNNMoney) -- European stocks moved sharply upward Tuesday amid speculation the European Union could provide additional aid for Greece, while Asian stocks rallied on strong manufacturing data from Japan.

The advance in Europe came after a report in the Wall Street Journal said Germany may abandon its push for an early rescheduling of Greek debt, which could set the stage for another round of emergency funding for Athens.

"Risk assets are rallying overnight, after a WSJ story said that Germany is considering dropping its push for a rescheduling of Greek bonds, in order to facilitate a new aid package for Greece," analysts at Deutsche Bank wrote in a note to investors.

Concerns about the Greek economy, which is beset by massive public debt, have been festering for over a year. While the EU and the International Monetary Fund have already approved billions of dollars in loans for Greece, the nation continues to struggle.

Germany and some other European powers had argued that additional aid for Greece should be tied to more austerity measures. But supporters of more aid say the Greek economy is too weak to handle further cutbacks.